TaxTMI 
TaxTMI 
2019 (7) TMI 1908
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....edings and furnished the details. The AO completed the assessment u/s 143 (3) of the Act after making disallowance of Rs. 2,39,84,301/- u/s 14A, addition on account of increment in negative reserves amounting to Rs. 10,11,93,000/- and addition of Rs. 3,63,70,719/- rejecting the claim incurred by the assessee in non participating linked pension business segment. The assessee challenged the assessment order passed by the AO before the Ld. CIT (A). The Ld. CIT (A) after hearing the assessee partly allowed the appeal of the assessee and deleted the aforesaid additions made by the AO. The revenue is in appeal against the impugned order passed by the Ld. CIT (A). 3. The revenue has challenged the impugned order passed by the Ld. CIT (A) on the following effective grounds:- "1. Whether on the facts and circumstances of the case and in law, the Ld. CIT (A) was justified in stating that sec. 14A is not applicable to insurance business without appreciating the fact that assessee had claimed exemption u/s 10(34) of the Income Tax Act, 1961 on dividend income and hence provisions of sec 14A rwr 8D are applicable to assessee. 2. Whether on the facts and circumstances of the....
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....Bench rendered in the assessee's own case for the AY 2010-11. As pointed out by the Ld. counsel for the assessee, the coordinate Bench has decided the identical issue in favour of the assessee in the assessee's own case ITA No. 4110/Mum/2014 for the AY 2010-11. The relevant portion of the order passed by the coordinate Bench of the Tribunal reads as under:- " In regard to ground no.1 of assessee‟s appeal, the ld. counsel for the assessee argued that this issue is squarely covered in favour of the assessee by the decision of the co-ordinate bench of this tribunal ITAT, Mumbai in the case of ICICI Prudential Insurance Co. Ltd. Vs. ACIT [2012] 28 Taxmann.com 257(Mum), dated 14/09/2012, has decided the issue by following the Pune Bench decision in the case of Bajaj Allianz General Insurance Co. Ltd. Vs. Addl. CIT in ITA No. 1447/PN/2007 for AY 2003-04 dated 31/08/2009 wherein it has been held that in view of non obstante clause of Section 44 of the Act read with Rule 5 of Schedule 1 of the Act, provisions of Section 14A of the Act, as no application to the profit and gains of insurance business. The tribunal held as under: 46. This issue....
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....a decision of Tribunal , Delhi Bench verdict in the case of Oriental Insurance Co. Ltd. (ITA Nos. 5462 & 5463/Del /2003) asst. yRs. 2000-01 and 2001-02 order dt. 27th Feb. 2009 [reported as Oriental Insurance Co. Ltd. v. Asstt . CIT [2010] 130 TTJ (Delhi)388 : [2010] 38 DTR (Delhi ) 225--Ed. ] . Therefore considering the vehement reliance of learned Authorized Representative it is worth to mention at the outset itself that the issue now stood resolved by this latest decision of Delhi, Tribunal in the case of Oriental Insurance Co. Ltd. (supra), the relevant portion reproduced below: "17. We have heard rival submissions of the parties and have gone through the material available on record. Identical issue arose in assessee's own case for asst. yr. 1985-86. The Tribunal accepted the plea of the assessee and in fact the issue went up to ITA Nos.6854 to 6856 6509 7765 to 7767 and 7213 ICICI PRULIFE Mumbai F Bench the Hon'ble Delhi High Court in asst . yRs. 1986-87 to 1988-89, which is reported as CIT v. Oriental Insurance Co. Ltd. [2003] 179 CTR (Delhi ) 85 : [2002] 125 Taxman 1094 (Delhi ), decided the....
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....tanding anything to the contrary contained within the provisions of the IT Act relating to computation of income chargeable under different heads. We agree with the learned counsel that there is no requirement of head-wise bifurcation called for while computing the income under s. 44 of the Act in the case of an insurance company. The income of the business of insurance is essentially to be at the amount of the balance of profits disclosed by the annual accounts as furnished in the Controller of Insurance. The actual computation of profits and gains of insurance business will have to be computed in accordance with r. 5 of the First Schedule. In the light of these special provisions coupled with non obstante clause the AO is not permitted to t ravel beyond these provisions. 24. Sec. 14A contemplates an exception for deductions as allowable under the Act are those contained under ss. 28 to 43B of the Act. Sec. 44 creates special application of these provisions in the cases of insurance companies. We therefore, agree with the assessee and delete the act as according to us, it is not permissible to the AO to travel beyond ....
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....ase of the computation of profits and gains of any business of insurance, the same shall be done in accordance with the rules prescribed in First Schedule of the Act, meaning thereby ss. 28 to 43B shall not apply. No other provision pertaining to computation of income will become relevant. According to the learned counsel, two presumptions that follow on a combined reading of ss. 14, 14A, 44 and r. 5 of the First Schedule are: (a) That no head-wise bifurcation is called for. The income, inter alia, of the business of insurance is essentially to be at the amount of the balance of profits disclosed by the annual accounts as furnished to the ITA Nos.6854 to 6856 6509 7765 to 7767 and 7213 ICICI PRULIFE Mumbai F Bench Controller of Insurance under the Insurance Act, 1938. The said balance of profits is subject only to adjustments there under. The adjustments do not refer to disallowance under s. 14A of the Act. (b) Profits and gains of business as refer red to in (a) above have only to be computed in accordance with r. 5 of the First Schedule. 22. Sec. 44 creates a specific except ion to the applica....
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....d issue in favour of assessee. We hold accordingly. This issue is decided in favour of the assessee. 7. The coordinate Bench of the Tribunal has dealt with the identical issue in favour of the assessee in assessee's own case ITA No. 4110/Mum/2014 for the AY 2010-11 discussed above. We further notice that the coordinate Bench has further decided the identical issue in favour of the assessee in assessee's appeals for the AY 2011-12 and 2012-13 in ITA No. 6336/Mum/2016 and 3726/Mum/2017 respectively by following the decision of the coordinate Bench rendered in assessee's own case for the AY 2010-11. Since, the revenue did not point out any material change in the facts of the present case, we respectfully following the decision of the coordinate Benches, dismiss this ground of appeal of the revenue and direct the AO to delete the addition. 8. Ground No. 2 pertains to addition made on account of increment in negative reserves amounting to Rs. 10,11,93,000/-. During the assessment proceedings, it was observed that as on 31.03.2012, the company had negative reserve of Rs. 1,91,20,29,000/- and the corresponding figure stood at Rs. 2,01,32,22,000/- on 31.03.2013. Since, there was an i....
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....f Rs. 27.27 crores while determining respondent assessee‟s income under Section 44 of the Act. The impugned order records that the mathematical reserves is a part of the Actuarial valuation and the surplus takes into account the mathematical reserve also Besides the impugned order follows the decision of the Apex Court in LIC Vs. CIT 51 ITR 773, wherein the Apex court has held that the Assessing Officer has no power to modify the account after Actuarial valuation is done. It is also pertinent to note that for the Assessment Year 2007-08, the Assessing Officer had raised an identical issue during the assessment proceedings and thereafter by the assessment order dated 30 December 2009 held that no adjustment of the Actuarial valuation is to be done by following the decision of the Apex Court in LIC(supra). Therefore we find no substantial question of law arising for our consideration. In view of the fact that the impugned order has merely followed the decision of the Apex Court, we see no substantial question of law for our consideration. Accordingly, Question No. 6 is not entertained." 10. We find that the assessee followed the IRDA Recommendations and accordingly pre....
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....elevant material on record in the light of the rival submission of the parties. We notice that the coordinate Bench has decided the identical issue in favour of the assessee by upholding the findings of the Ld. CIT (A) in the assessee's case for the AY 2010-11. The operative part of the order passed by the coordinate Bench reads as under:- 11. Next issue of assessee‟s appeal is with regard to disallowance of Rs. 28,87,15,685 towards claim of assessee in non-participating linked pension business segment. For this, assessee has raised following Ground No. 2: 2. Ground No.2 Rejection of claim of Rs. 28,87,15,685/- being deficit incurred by the Appellant in Non-participating Linked Pension business segment. The CIT(A) erred in upholding the order of the AO rejecting the Appellant's claim of rs.28,87,15,685 being deficit incurred in Non-participating Linked Pension business segment. While rejecting the Appellant's claim, the learned CIT(A) erred on the following grounds: 2.1 The learned CIT(A) erred in disregarding the decision of jurisdictional High Court in the case of Life Insurance Corporation of India, relied upon by the Appellant, wherein it has be....
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....m Jeevan Suiraksha Fund would not be includible in the total income of the assessee and, therefore, while determining the distributable profits of the assessee, the loss from Jeevan Suraksha Fund ought not to be allowed to be adjusted against the taxable income. 17. It is not in dispute that the Jeevan Suraksha Fund is a pension fund approved by the Controller of Insurance appointed by the Central Government to perform the duties of the Controller of Insurance under the Insurance Act, 1938. The loss incurred in the Jeevan Suraksha fund has been considered by the actuary as a business loss, as per the valuation report as on the last day of the financial year, allowable under section 44 read with the First Schedule to the Income-tax Act, 1961. The fact that the income from such fund has been exempted under section 10(23AAB) with effect from 1st April 1997, does not mean that the pension fund ceases to be insurance business, so as to fall outside the purview of the insurance business covered under section 44 of the Income-tax Act, 1961. In other words, the pension fund like Jeevan Suraksha Fund would continue to be governed by the provisions of section 44 of the Income-tax Ac....